'Our' new government (letter)

by Martin Gordon

News Weekly, September 18, 2010

Sir,

A new Labor-Green Coalition has taken office. A number of lessons can be learnt, but it may sound like "a tale of two lessons".

The outcome could be good or bad for the long-term aims of the Greens. Elsewhere in the world the Greens have fallen back after a peak, and once they are exposed to scrutiny, the priorities of the Greens (which are the reverse of those of the community at large) will soon lose their resonance.

As for Treasury scrutiny of electoral promises, perhaps the best approach may be to ignore it completely. Labor basically did this in 2007, then dumped its policies on Treasury the day before the election.

This meant that Labor's bungled school computers program and broadband plans (whose cost soared from $4.7 billion to $43 billion) was never properly scrutinised.

The public seem fixated on broadband, despite its cost. The scheme is a political winner - that is, until the public realise how much they will have to pay for it. Is that a lesson too?

The current preoccupation with submitting all policy programs to costing by Treasury has embarrassed the Coalition (thanks to a substantial media beat-up).

However, little attention has being brought to bear on some of the Treasury's massive errors in economic forecasting. Nor does Treasury scrutiny apparently apply to Green policies, which are largely "pure" fairy dust.

The big miners believe such a tax will cost them hundreds of millions, while Treasury believes it will raise many billions in tax revenue.

If Treasury is wrong, as I suspect it is, and the big miners are right, then the Labor-Greens Coalition will discover it has a big budget black hole. That would be ironic.

Minority governments may appear to be more accountable to parliament and can work, but they are rarely decisive. If severe economic problems and major foreign policy issues arise, a hung parliament, like Australia's during 1940-43, may find it hard to resolve them.